Mobile payments and other phone-based transactions represent a must-win opportunity for banks in Africa. The estimated market in facilitating payments alone is $500bn and, providing access to energy, healthcare, education and transportation, offers new business prospects.
By using digital platforms it offers the potential to develop more holistic solutions that solve deep-rooted customer friction points for African consumers.
Such mobile ecosystem solutions have been extremely successful in China and South East Asia. We believe Africa is the next foreground for exponential growth,” says Tijsbert Creemers, managing director and Partner at Boston Consulting Group, and co-author of Five Strategies for Mobile-Payment Banking in Africa.
“The other key factor is customer awareness: Africans are increasingly likely to have mobile phones and are eager for services that contribute to a higher quality of life. Already, 400-million consumers in sub-Saharan Africa use mobile payment banking systems. By 2025, the mobile payment market could reach 650- to 750-million customers.”
As African economies continue to evolve and with the Covid-19 crisis rapidly raising peoples’ interest and need for contactless transactions, the mobile device will become the payment vehicle of first resort – and banks need to embrace this reality to forge a path to success.
There are five potential strategies that banks in Africa may adopt to harness the possibilities that mobile payments present – depending on the bank’s size, capabilities, technological experience, and the role that it might play in its local or regional business ecosystem.